Bankruptcy
Lordstown Motors SEC filing:
"Due to the production delays from early January to mid-April 2023, the failure to identify a strategic partner for the Endurance, and extremely limited ability to raise capital in the current market environment, we anticipate production of the Endurance will cease in the near future... To date, we have not identified a strategic partner for the Endurance."
Its partner, Foxconn, is threatening to end its investment deal. Lordstown received a delisting notice from NASDAQ after a month of shares trading below $1.
Change In Management
GM announced this week that North American head Steve Carlisle is retiring. Current Cadillac VP Rory Harvey will succeed him on June 1.
Closing
Lear Corporation is closing two of its plants in Detroit, Michigan, by June 30. The closures will affect around 558 employees, but Lear has offered to transfer and continue to employ most of them.
Earning Dip
BorgWarner forecasted this year's sales below analysts' estimates. The company is struggling with a scarcity of certain raw materials, which results in higher procurement costs.
Expanding
Albemarle will double the capacity at its lithium hydroxide processing operations south of Perth in Australia. It plans to produce 100k tonnes by 2026 by spending $1.5B to add two more trains.
Human Capital
GM has cut several hundred contract positions at its Tech Center in Warren, Michigan. The company wants to cut $2B by the end of 2024. It is already on track to half of its goal. In January, CEO Mary Barra said that GM was "not planning layoffs" and then offered buyouts to its salaried employees. Nearly 5K employees took the buyout.
Stellantis is offering buyouts to 2.5K salaried and 31K hourly workers out of its 56K total in the US. An unknown number of the company's Canadian workers are getting involuntary separation packages.
Industry Directions
Although Ford dropped prices on its Mach-E in response to Tesla's cuts, CEO Jim Farley says they were "a worrying trend."
Labor
Workers at a Yanfeng's Riverside, Missouri, plant voted to join the UAW. The company supplies GM's Kansas City plant and is the 6th to organize with the UAW.
Litigation
Former Audi executive Rupert Stadler is reportedly set to confess his role in the diesel emissions scandal next week. The confession is in exchange for a suspended sentence and a fine of $1.21M.
This week, a federal judge in Detroit reversed a jury verdict ordering Ford to pay Versata Software $104.6M for breach of contract and violating trade secrets. Judge Matthew Leitman said that while Versata showed sufficient evidence of a contract breach, they did not provide enough evidence for jurors to calculate damages accurately.
Mergers, Ventures, Acquisitions
Volkswagen and Bosch have canceled their joint venture to equip battery cell factories. However, the partnership between the two companies to digitize Volkswagen's battery factories will continue on a project level. The joint venture was intended to supply battery production systems and support battery cell manufacturers in scaling up their production.
Opening
Norwegian hydrogen company Nel plans to build a $400M plant in Michigan to manufacture alkaline electrolyzer equipment for renewable hydrogen, the first plant of its kind in the US. Nel has partnered with GM to accelerate its proton exchange membrane electrolyzer platform.
The current owners of the former site of the Palace of Auburn Hills in Auburn Hills, Michigan, are looking into building a 1.1M sq ft parts plant. The site would become a supplier park to support EV production at GM's Orion Assembly Plant in Lake Orion, Michigan.
Production Increase
Ford's profits in Q12023 were $1.8 billion, a significant improvement from the previous year's loss of $3.1 billion. The decline in Rivian valuation and semiconductor shortages caused the last year's losses.
Risk Analytics
A report by S&P Global Mobility suggests that the transition to EVs will lead to a grueling shakeout and consolidation among ICE suppliers. The transmissions and engine systems markets are expected to shrink more than 50 percent by 2035.
Four potential strategies for moving forward:
Embrace EV production parts and divest from combustion components
Commit to ICE and concurrently plan for closing the doors
Establish prominence as a supplier of certain parts
Prepare for acquisition
Small suppliers, as well as those not concentrated on the aftermarket, will be at higher risk.